Foreclosure is coming. Whether by choice or circumstances, you know the bank will take the house.
Should you start packing immediately?
The way banks are currently operating, the answer is: not yet, not soon, not for a long time.
For one of my clients, the answer to how long was well more than 735 days. And they did nothing to delay the inevitable.
Here’s the foreclosure timeline for this California couple.
A year of missed payments
When they filed bankruptcy in June, 2013, they were 13 months behind on their mortgage. That’s 390 days without paying.
The house was waaaaay underwater and they decided upfront to let it go. And said so in the Chapter 13 plan.
From bankruptcy filing to relief from stay
It took 477 days from the commencement of the bankruptcy case for the lender to request and get an order from the bankruptcy court permitting them to foreclose.
Court order til foreclosure
It took another 180 days to actually conduct a sale. At that point, the lender owned the house, but the couple was still living there.
Sale to eviction
Then, remarkably, another 271 days went by before the bank took steps to evict the former owners from the house that it had owned for more than 8 months. And the bank paid the former owners some cash to move out voluntarily.
Your mileage may vary
The experience of this couple doesn’t assure you of a mortgage servicer with a similarly lackadaisical approach. But it is consistent with the data on California foreclosure.
The takeaway is: don’t move out until you absolutely have to.
Living rent free til the foreclosure allows you to build up a kitty to finance the move. Or feed your retirement fund. Or start saving for a new house.